Not a bad problem to have!
A few interpretations:
#1: Customers now know that LULU's return policies are evil, so they prefer to give gift cards instead of actual clothes.
#2: Customers thought that the current crop of LULU clothes were either unavailable, ugly, or overpriced, so they gave gift cards
#3: Customers expected price cuts post xmas, and were correct.
On you #3, Christine Day says to CNBC today that "we don't do promotions or play the discount game"...
Regardless of any number of interpretations... the most obvious is that LULU is getting $$$ towards its sales because people think their friends and love ones will appreciate getting LULU clothing, period.
I saw multiple christmas lists that had their clothes listed too. A good sign.
But bad timing right now for the stock price....will need some good earnings and expectations to over ride the recent bad investing press.